No Gratuity on Resignation for Central Government Employees under NPS: DoPPW Clarifies

The Department of Pension & Pensioners’ Welfare (DoPPW), under the Ministry of Personnel, Public Grievances & Pensions, has issued a clarification regarding the eligibility of Central Government employees covered under the National Pension System (NPS) for gratuity payment upon resignation.

In an Office Memorandum (No. 2/8/2025-P&PW(F)), the Department stated that government employees under the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021 are not entitled to gratuity if they resign from service — except in specific cases defined under the rules.

Rule Position Explained

According to Rule 22 of the CCS (Payment of Gratuity under NPS) Rules, a government servant who has completed five years of qualifying service is eligible for retirement gratuity or death gratuity only when:

• They retire on superannuation or invalidation,
• Take voluntary retirement under the relevant provisions, or
• Are absorbed in a government-controlled corporation, company, or body.

The gratuity in such cases is calculated at one-fourth of the employee’s emoluments for each completed six-monthly period of service, subject to a maximum of 16½ times the emoluments.

Resignation Leads to Forfeiture of Service

The Department further clarified, referencing Rule 17, that resignation ordinarily entails forfeiture of past service, and consequently, no gratuity is payable.
However, two exceptions have been recognized:

1. Technical resignation — when an employee resigns to take up another government post with proper permission.
2. Absorption cases — when an employee is deemed to have retired upon absorption in a public sector undertaking or government-controlled body (as per Rule 32).

In both these cases, the employee’s past service is protected and gratuity becomes payable as per the applicable rules.

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